Are you familiar with this loop hole for avoiding the early withdrawal penalty from your IRA?

Are you familiar with this loop hole for avoiding the early withdrawal penalty from your IRA?

The following is an excerpt from IRS.gov

An additional 10% tax applies to early distributions (before the participant reaches age 59½) from a retirement plan or IRA under Code §72(t)(1).

Section 72(t)(2) lists exceptions to this tax, including distributions received in substantially equal periodic payments.

Is there an exception to the tax for early distributions made in substantially equal periodic payments?

Yes. If distributions are made as part of a series of substantially equal periodic payments over your life expectancy or the life expectancies of you and your designated beneficiary, the §72(t) tax does not apply. If these distributions are from a qualified plan, not an IRA, you must separate from service with the employer maintaining the plan before the payments begin for this exception to apply. If the series of substantially equal periodic payments is subsequently modified (other than by reason of death or disability) within 5 years of the date of the first payment, or, if later, age 59½, the exception to the 10% tax does not apply. In that case, your tax for the modification year is increased by the amount that would have been imposed (but for the exception), plus interest for the deferral period.

https://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Substantially-Equal-Periodic-Payments

(The above is a quote from the IRS website and should not be considered tax advice)